Sell A Life Insurance Policy During The Coronavirus Pandemic

Now more than ever seniors and their families are increasingly concerned about finances and their retirements accounts. The current economic climate, as a result of the Coronavirus pandemic, has left so many seniors wondering how will I pay for future living expenses. With so much uncertainty, Seniors may want to look at the possibility of selling a life insurance policy to generate much needed cash.

A life insurance policy may have originally been purchased for income protection for their family, but the high costs of premiums may become too much to bare. During this time, the cost of insurance premiums may be better utilized elsewhere such as assisted living expenses, health care, food, and rebuilding savings for the future.

Seniors now face the daunting question do I let my life insurance policy lapse? What other options do I have when I can no longer afford the premiums? The questions seniors should be asking is not should I let my policy lapse, but rather how much is my life insurance policy worth, and how do I sell it for cash? A life settlement option is a valuable financial tool that seniors should consider before surrendering a life insurance policy. A life insurance policy may be worth significant cash that can be utilized to help rebuild a retirement account.

Selling a life insurance policy as a life settlement is a simple process, but what happens when you need to sell a life insurance policy during the 2020 global pandemic of Covid 19? Life Policy Solutions helps answer questions and we guide you every step of the way.

In this article we will answer the following:

• What if you are a high risk individual selling a life insurance policy? Are there steps being taken to protect you?
• Life settlement broker versus direct life settlement provider
• Life settlement process – 8 Steps to sell a life insurance policy
• How much is my policy worth?
• What to expect once you get a life settlement offer

Once a senior decides they want to explore selling a life insurance policy for cash, the first step is to gather their policy data and contact a life settlement broker, such as Life Policy Solutions, or contact a life settlement buyer directly, such as Coventry Direct, or other direct buyers. Click Here for a list of the Top 10 Life Settlement Companies of 2020.

What If I Am A High Risk Individual Trying To Sell My Life Insurance Policy?

We are in scary times and your health is priority number one. Life settlements are for designed for seniors, mostly age 75 and older. Individuals in that age range are essentially all high risk to the Covid 19 Coronavirus. What happens though if you need to sell the policy during the Coronavirus Pandemic? What extra steps can be taken to help protect you? We reached out to a few life settlement buyers to provide some important information.

• Seniors can do all the work of selling a life insurance policy by phone, email, fax, or mail. You do not need to meet in person with a direct life settlement buyer or a life settlement broker
• If you need to discuss any information with your doctors or your financial advisors, most are available by phone or video chat.
• If you need help with mailing documents or scanning documents for email and can not leave your home, there may be pick up and delivery services available. Life Policy Solutions can help arrange services to help assist you.
• Once you accept a life settlement offer, you can ask the buyer, or have your broker ask, if notarizing the contracts can be waived in exchange for witness signatures instead. Some buyers have been offering waived notary to high risk individuals such as those with cancer and other terminal illnesses. It is worth asking the buyer at the time of accepting an offer.
• Proceeds from selling your life insurance policy can be direct deposited into your bank account. If you are not familiar with how to provide wire instructions all you have to do is call your local branch and ask for details. If you still prefer a check, the check will always be sent via UPS or Fedex overnight so there will be minimal handling.
• Your health and well being is most important to every life settlement buyer and life settlement broker and they will make every effort to meet any special needs or instructions.

The life settlement process is designed to be easy. Whether you work with a life settlement broker, or with a direct buyer, tell them your concerns about coronavirus and ask them for help. We are all working together and in the best interest of each other’s well being. Selling a life insurance policy during this time should make you feel safe and protected at all costs.

Life Settlement Broker versus Life Settlement Direct Buyer

What Is A Life Settlement Broker?

A life settlement broker works directly for the senior client to assist in selling a life insurance policy for the most cash available. A life settlement broker works for a fee, usually a percentage of the sale price. In exchange for that fee the broker will utilize their relationships with a network of life settlement buyers and present the policy to multiple buyers at the same time in an effort to create as much interest as possible. Much like selling a car at auction, or selling a house, the more buyers interested the more valuable the asset. The same goes for selling a life insurance policy. A life settlement broker acts like an agent representing the sale and pushing bids up to maximize the value of the policy. In addition to fielding offers, a life settlement broker should oversee the entire sale process and protect the client’s best interest. They should provide guidance and be available to answer any and all questions from start to finish.

What Is A Life Settlement Company?

A life settlement company, or life settlement provider, on the other hand is a direct life insurance buyer. They work with both the policy owner or they work with the life settlement broker. If the life settlement company is working directly with the policy owner, then they will present their offer directly and take care of the entire sale process. Working with a life settlement company directly can result in more money to the policy owner because they do pay pay a broker fee, however there is a risk because the policy is only shown to one buyer. A broker on the other hand can generate offers from multiple buyers and build up the value. In the end, a direct buyer may sound good up front, but you may be leaving significant money on the table even after paying a broker fee.

Life Settlement Process

Understanding the life settlement process will help you get ready to selling your life insurance policy. Below is the 8 Step Guide to selling a life insurance policy:

• Step 1 – Gather Your life insurance policy information. Be prepared to provide death benefit, premiums, cash value if any, and type of policy such as term, universal life, whole life.
• Step 2 – Decide whether you want to work with a life settlement broker or work direct with a life settlement buyer. You can do research on your own via internet, or discuss with your advisors such as a life insurance agent. Another good source of information is LISA, the Life Insurance Settlement Association.
• Step 3 – Complete a life settlement application. Each company or broker will have an application that will need to be completed. You will be asked personal information, policy information, as well as, being asked to provide a health summary
• Step 4 – The life settlement broker, or company, will begin to review and gather information such as your medical records and a life expectancy report. All information is always protected.
• Step 5 – Once all information is gathered, the policy is ready for offers. If the policy is being represented by a broker such as Life Policy Solutions, then multiple offers may be presented. If a direct life settlement buyer is offering then you will receive their single offer. (NOTE: not all life insurance policies will receive an offer)
• Step 6 – Negotiations. If an offer is made then it can be negotiated, and hopefully increased. If you work with a direct buyer you can always ask for more money. Remember a direct buyer wants to buy low. Set a goal and try hard to push the direct buyer up in offer. If a broker is representing the sale, then they will be experienced in negotiations and have relationships in order to increase an offer. If a broker has multiple offers on the table then they will bid the buyers against each other in an effort to creat a bidding war.
• Step 7 – You accepted a life settlement offer now what? The buyer will prepare sale contracts and they will be mailed to you for signatures. Contracts do require notary signatures, and during coronavirus all notaries are practicing social distancing. Some buyers may be able to waive notary depending on your at risk health. It is best to discuss with your broker or buyer.
• Step 8 – Once signed contracts are received back to the buyers, they will do final reviews and the sale proceeds from the life settlement sale will be deposited into your bank account, or a check will be issued.

How Much Is My Policy Worth?

How much a life insurance policy is worth depends on many factors including the type of policy, company who issued the policy, death benefit amount, cost of premiums, health and life expectancy of insured, and the current market interest to purchase policies.

Many individuals believe when selling a life insurance policy that it should be worth 50% at least. Unfortunately we need to be realistic and understand that the policy is being sold to an investor and they are looking for a maximum return on investment. The truth is most policies fall in the range of 5%-25% of the face value of the policy, or for a $1,000,000 policy the sale would be between $50,000 and $250,000. Now there are the times where a policy is worth 40%, 50%, even 70% of face value, but the insured is generally in poor health with a very short life expectancy. Some policies have more value to one buyer than another, which is a reason why it is best to work with a broker. A broker will know how to best present the policy for maximum exposure and value.

In addition to a lump some cash life settlement offer, some buyers offer a retained death benefit option. This is a type of sale where there is little to no cash exchanged up front at the time of sale, but rather the policy owner sells a portion of death benefit to a buyer and retains, or keeps, a portion of the death benefit for their own beneficiary to be payable at death. This is a financial tool used when a policy owner still needs some life insurance, but no longer wants to pay premiums. Retained Death Benefit life settlements are available in some states.

The life settlement value of your life insurance policy involves many factors, and you never know the real value until an offer is made by a buyer. It is always best to not rely on life settlement calculators that you find on websites, and take life settlement estimates lightly. A life insurance policy is only worth what an investor will pay for it and no estimate or calculator can guarantee that amount.

What To Expect When You Get A Life Settlement Offer

Great news, you received an offer to sell your life insurance policy! Those are the words every policy owner wants to hear. The next words policy owners want to hear is the offer is 60%! We all can dream right? In reality, the conversation is more like you have received an offer on your $500,000 universal life insurance policy for 20%. Would you like to accept the offer? The offer means that the buyer has agreed to pay you $100,000 for your $500,000 life insurance policy. Not a bad deal if you had planned to cancel or lapse your insurance policy. Now you have a choice to either accept the offer or try to negotiate for more money. If you are working with a life settlement broker they would advise you of all offers if more than one, whether they will be negotiating more money, or if you have received the best offer available.

If you chose to accept a life settlement offer then the buyer will begin to prepare sale contracts. The contracts are legal sale documents to transfer ownership and beneficiary rights of the life insurance policy to the new buyer. Remember a life insurance policy is an asset, it’s a piece of property that you own and you are selling that property to a new buyer.

While the contracts are being prepared, signed, and reviewed it is the policy owners responsibility to maintain the premiums on the policy.

Once the transaction is completed and the life insurance company verifies the ownership and beneficiary change to the new owner, the proceeds of the sale are released to the original policy owner by direct deposit or check.

The life settlement process is designed to be simple for all parties involved from start to finish. Selling a life insurance policy during the current Coronavirus Pandemic should be no different. The process should remain simple and a policy owner selling a life insurance policy should feel safe and protected at all times.

As life settlement brokers, Life Policy Solutions professional opinion is that policy owners work with a broker rather than contact life settlement companies directly. The life settlement process is best navigated by a broker to ensure a policy owner receives the highest life settlement offer available from the maximum number of life settlement buyers. More importantly, during this time, a life settlement broker can best communicate directly with buyers on a policy owner’s behalf to ensure all safety measures will be met throughout the life settlement process. Stay Safe.